Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives.

Federal Circuit Cases

Percipient.ai, Inc. v. United States, Fed. Cir. No. 2023-1970

• We have been covering the Percipient.ai protest, which has sparked significant litigation over the scope of Court of Federal Claims (COFC) bid protest jurisdiction.
• The protest argues that the National Geospatial-Intelligence Agency (NGA) failed to satisfy its obligations under the Federal Acquisition Streamlining Act (FASA) when deciding to develop software under a task order vehicle rather than acquire an existing commercial solution.
• COFC initially found that the protest was timely and justiciable, but later reversed course and dismissed the protest as precluded under the FASA task order protest bar.
• Percipient.ai sought expedited appeal proceedings at the Federal Circuit; the Court permitted Percipient.ai to expedite its own briefing and assured the case would be scheduled for argument relatively soon after briefing is complete, but the Court declined to accelerate the deadline for response briefs.
• Percipient.ai filed its opening brief, arguing that the protest is not barred by FASA, but rather seeks to hold the agency accountable to FASA.
• Based on their responses in opposition to the motion for expedited briefing, the government and intervenor appear poised to defend COFC’s holding and raise alternative arguments for dismissing the protest (i.e., re-raise the standing and timeliness challenges that COFC previously rejected).

The Percipient.ai protest raises important and interesting substantive questions about the scope of an agency’s obligations under FASA. These issues go to the heart of how agencies can use the now-ubiquitous “umbrella contract” vehicles like IDIQs, GWACs, and MACs. But the posture of the protest may mean that procedural issues like jurisdiction, Blue & Gold, and “interested party” status prevent the Court of Federal Claims from ever reaching the substantive issues. Either way, there is a lot for contractors, procuring agencies, and their counsel to learn from this litigation as it works its way through the Federal Circuit.

FOIA Exemption 4 Cases

Flyers Rts. Educ. Fund, Inc. v. Fed. Aviation Admin., No. 21-5257 D.C. Cir. (June 30, 2023)

• In 2020, following the conclusion of the FAA’s 20-month review of Boeing 737 MAX planes after a decision to ground them in 2018 in light of two deadly plane crashes, Flyers Rights filed a FOIA request seeking documents the FAA relied upon to determine whether to authorize the planes to reenter service.
• While the FAA identified responsive documents, it withheld or redacted most documents under FOIA Exemption 4, which protects trade secrets and privileged or confidential commercial or financial information.
• Flyers Rights challenged the agency’s use of FOIA Exemption 4, but the district court sustained the FAA’s application of the exemption. The DC Circuit affirmed the district court’s decision on appeal.
• The DC Circuit elaborated on a question left open by the Supreme Court’s decision in Food Marketing Institute v. Argus Leader Media on whether information is confidential—and therefore protected under FOIA Exemption 4—only if “the party receiving it provides some assurance that it will remain secret.” Food Marketing Institute v. Argus Leader Media, 139 S. Ct. 2356, 2363 (2019).
• Relying on this uncertainty in Argus Leader, Flyers Rights argued that while Exemption 4 does not always require an assurance of secrecy, it cannot apply where an agency explicitly represents before disclosure that the information would be released.
• But the DC Circuit rejected Flyers Right’s factual predicate that the various statements made by the FAA and Boeing that the investigation would be conducted with “transparency” were in fact explicit commitments to release information, and thus held that Exemption 4 properly applied.

This decision serves as a reminder that it is yet unsettled what role the dicta regarding the assurance of secrecy in Argus Leader plays in whether confidential information qualifies for protection under Exemption 4. Contractors providing information to the government should consider requesting confirmation from the agency that its confidential information will be kept confidential. At a minimum, contractors should be wary of express statements by the agency that the contractor’s information will be subject to disclosure.

Protest Cases

Leidos Inc.; Booz Allen Hamilton Inc., B-421524 et al. (June 20, 2023)

• GAO denied a protest challenging the agency’s failure to conduct a price realism evaluation because the terms of the solicitation did not require the agency to conduct such an assessment.
• In this cmpetition valued in excess of $1 billion, the Department of Treasury issued a solicitation to establish a blanket purchase agreement for IT and cloud solutions.
• One protester alleged that the solicitation required a price realism evaluation and that the awardee’s proposal—which was more than $140 million less than the protester’s—contained risk that was unaccounted for by the agency.
• GAO disagreed, finding that the solicitation’s language was permissive, not mandatory. GAO focused on the lack of an express price realism evaluation criterion, as well as the overall structure of the solicitation, to conclude that the agency reserved the right to conduct a price realism evaluation but did not commit itself to doing so.

In a fixed price environment, procuring agencies do not necessarily have to conduct a price realism evaluation because the risk of loss is on the contractor rather than on the government, but may include such a provision when the agency is concerned that its requirements may not be fully understood by offerors. Where, as here, a solicitation merely reserves the agency’s right to conduct a price realism evaluation, such an assessment remains at the agency’s discretion.

BOF GA Lenox Park, LLC, B-421522 (June 20, 2023)

• GAO sustained a protest where an agency unreasonably evaluated the awardee’s proposal as complying with material terms of the solicitation.
• On behalf of the Drug Enforcement Agency, the General Services Administration (GSA) issued a request for lease proposals (RLP) for the provision of commercial office space in the Atlanta, Georgia area. The RLP contained certain public transportation requirements, including that a subway, light rail, or bus rapid transit stop shall be located within the immediate vicinity of the building offered.
• The protest alleged that the awardee should have been evaluated as technically unacceptable because its proposed property did not meet a material RLP requirement for proximity to public transportation options, including, as relevant here, a “bus rapid transit stop.” Instead, the awardee was only located within the vicinity of traditional, standard bus lines. In response, GSA argued that “bus rapid transit” did not refer to any specific type of bus transit system, and the protester’s definition was too restrictive.
• GAO agreed with the protester, finding that the RLP included a specific term, which was provided at the direction of a GSA lease alert and regularly used in all GSA leases, intended to require proximity to a particular type of transit service. GSA therefore improperly evaluated the awardee’s proposal on this basis.
• GAO also found prejudice because the protester stated that it considered purchasing the property offered subsequently by the awardee but “had discounted it because of the lack of proximity to rapid transit required by the RLP.” This was sufficient for showing a reasonable possibility of prejudice.

This decision reinforces that GAO will scrutinize solicitations when deciding protest grounds challenging the waiver or relaxation of requirements. To win such protests, however, it is critical for protesters to identify how the waiver or relaxation affected their substantial chance of receiving the award.